Economics Dictionary of ArgumentsHome
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| Tariff comparisons: In economics, "tariff comparisons" refers to the analysis and evaluation of different tariff rates and structures across various countries, industries, or historical periods. This analysis helps economists understand the impact of trade policies on factors like trade flows, consumer prices, and domestic industry competitiveness. It's a key tool for assessing the effects of protectionism versus free trade. See also Tariffs, Tariff policy, Tariff history, Tariff impacts._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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IMF Working Papers on Tariff Comparisons - Dictionary of Arguments
Jaumotte I 15 Tariff Comparisons/Eugster/Jaumotte/MacDonald/Piazza: We address* this issue in two ways. In the first approach, we standardize all tariff measures. Regression coefficients thus no longer show the effect of a one-percentage-point increase in the respective tariff, but the effect of a one-standard deviation change. (…) the coefficients of the upstream and downstream tariffs decline somewhat, while the ones of domestic protection and the diversion tariff increase. For value added for example, one-standard deviation changes in the upstream or downstream tariffs have roughly comparable effects to trading partners reducing tariffs imposed on competitors by the same extent. While looking at the effects of a one-standard deviation change helps make the effects more comparable, the procedure ignores that the various tariffs are closely connected. A tariff increase by one country can affect one or several tariff measures for all the countries in the sample, yet potentially to very different degrees. For example, a discriminatory tariff will likely affect the domestic protection of the home country or the downstream tariff of the targeted one more strongly than it affects the trade diversion tariff of the untargeted. We thus use simulations to illustrate how a given tariff change would likely affect the respective tariffs and eventually the economic prospects of the various countries concerned. Jaumotte I 16 The effects are most negative for China and the US themselves, driven by the significant changes in the upstream and downstream tariffs and the large coefficients associated with them. Domestic protection also increases but given a coefficient very close to zero, it barely shows up in the graph. Other countries generally benefit from significant trade diversion, but downstream tariffs – and to a lesser extent – upstream tariffs partly offset these gains in value added. This is particularly the case for countries such as Korea, Japan and Canada. In terms of magnitude, our estimated effects are significantly larger than those from theoretical generalequilibrium models. For example, according to our coefficients a reciprocal and uniform increase in bilateral tariff by 25 percentage points between the US and China would reduce Chinese value added by roughly 5½ % in the long run and US value added by roughly 3%. Model simulations published in IMF (2019)(1) suggest that the likely effects on GDP may only be a fraction of this. Part of this difference is likely due to general equilibrium effects being absorbed in our framework by the country-year fixed effects. Changes in the exchange rate or in the costs of factors of production likely attenuate the macro-economic impact of tariffs. An additional plausible driver of our bigger effects is the fact that our tariff elasticities are estimated on a sample of manufacturing sectors only, which are likely particularly sensitive to tariffs. >US Import Tariffs, >Tariff responsivity, >Tariff impacts, >Tariffs, >Tariff history, >International trade. * Johannes Eugster, Florence Jaumotte, Margaux MacDonald, and Roberto Piazza. (2022). The Effect of Tariffs in Global Value Chains. IMF Working paper 22/40. International Monetary Fund. 1. International Monetary Fund 2019, "The Drivers of Bilateral Trade And The Spillovers From Tariffs", World Economic Outlook, Chapter 4, April 2019_____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
IMF Working Papers Jaumotte I Florence Jaumotte Johannes Eugster Margaux MacDonald, The Effect of Tariffs in Global Value Chains. IMF Working paper 22/40. International Monetary Fund. Washington, D.C. 2022 |
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